SEIS (Seed Enterprise Investment Scheme)

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Your company must be less than two years old, have fewer than 25 employees, and gross assets under £200,000.

The business must also be carrying on a qualifying trade and not be listed on any stock exchange.

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Investors can claim 50% income tax relief on investments up to £100,000 per tax year, plus capital gains tax exemption if they hold shares for at least three years.

They can also defer capital gains tax by reinvesting gains into SEIS qualifying companies.

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Your company can raise a maximum of £150,000 through SEIS during its lifetime.

Individual investors can invest up to £100,000 per tax year across all their SEIS investments combined.

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You'd most likely first encounter SEIS when speaking with potential investors who mention they're looking for "SEIS-qualifying investments" to reduce their tax liability, or when your accountant suggests structuring your early-stage fundraise to take advantage of this scheme.

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You'll need to submit an application to the relevant tax authority once you've issued shares to investors.

The application includes company details, business activities, and confirmation that you meet all qualifying conditions.

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Once approved, you'll receive certificates (EIS3 forms) to give to your investors so they can claim their tax relief.

You must also submit annual returns and notify authorities of any changes that might affect your qualifying status.

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Yes, many SEIS companies go on to raise larger rounds through EIS (Enterprise Investment Scheme) or traditional venture capital, though this may affect the tax treatment of later investments.

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You cannot pay dividends for three years, directors' salaries are capped, and you must use the investment for business growth rather than extracting value for existing shareholders.